Stock Market Weekly Forecast - Nasdaq Nears 25,000, Dow Hits 46,758 as Markets Defy Shutdown

Wall Street Defies Shutdown Turmoil as Nasdaq, S&P 500 and Dow Hit New Highs Amid Liquidity Euphoria and Policy Uncertainty

October 2025 opened with extraordinary divergence between economic headlines and market behavior. Despite the ongoing U.S. government shutdown and renewed fiscal gridlock in Washington, equity benchmarks continued their relentless advance. The S&P 500 (SPX) climbed to a fresh record high near 6,716, up 8.6% since August, while the Dow Jones Industrial Average (DJI) ended at 46,758, marking its fifth consecutive weekly gain. The Nasdaq Composite (NDX), meanwhile, pushed toward the 25,000 psychological ceiling before slight profit-taking late in the week. Across the Pacific, India’s Sensex (BSE:SENSEX) and Nifty (NSE:NIFTY) held firm near record territory as domestic metals, PSU banks, and industrials extended their rally. Yet beneath this surface optimism, several signals point toward stretched valuations, slowing breadth, and mounting policy tension.

S&P 500 (SPX) Momentum Peaks at Record High as Valuations Flash Warning Signs

The S&P 500 posted a sixth straight daily advance and a fifth weekly gain, sustaining a 12-week recovery that now totals nearly 9% from its August low. The index closed just below 6,720, propelled by renewed strength in industrials, semiconductors, and discretionary sectors. RSI levels above 70 indicate overbought momentum, while the index’s forward P/E ratio has crossed 22x, its richest multiple since 2021. Technical support now stands at 6,606, aligning with the August trendline, and deeper support lies around 6,342, the July high-day close and August open. Any sustained move below these zones could confirm that short-term exhaustion is building.

The upside target remains focused on 6,790–6,911, a resistance area marked by Fibonacci extensions from the April advance. A decisive breakout above 6,911 would position the market for a possible push toward the 7,000 handle, where profit-taking is expected to intensify. Trading desks across Wall Street report light hedge coverage despite record highs, suggesting complacency rather than conviction.

Nasdaq (NDX) Tests 25,000 Resistance as Mega-Cap Tech Stretches the Market’s Elasticity

The Nasdaq Composite continued to outperform broader indices, closing near 22,780, up 1.2% for the week but briefly touching 24,900, the highest level in history. The surge was led by NVIDIA (NASDAQ:NVDA), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Meta Platforms (NASDAQ:META), which now collectively account for more than one-third of total S&P 500 capitalization. However, analysts warn that the rally is narrowing—only 20% of Nasdaq constituents outperformed the benchmark this week.

The technical confluence between 24,640 and 25,041, representing the 2.618% extension of the 2022 advance, is a crucial pivot zone. Should the index close above this level, it could unleash a rapid breakout toward 26,000, while a pullback below 23,712 might trigger a corrective wave back toward 23,000. Divergences in RSI momentum and elevated valuations hint that the Nasdaq’s near-term upside is vulnerable, especially as Treasury yields steady around 4.45%.

Dow Jones (DJI) Extends Five-Week Rally Toward 47,400 as Old-Economy Stocks Regain Momentum

The Dow Jones Industrial Average added 0.51% this week, closing at 46,758, its highest finish on record. Technical charts show clear continuation patterns above the June trendline, with upside targets now set at 47,400 and 48,279, representing key Fibonacci extensions of the 2020 cycle. Bulls remain in control as long as the index holds above 45,000, the 2024 high-close zone that now serves as structural support.

Rotation into industrials and financials continues to dominate, with Bank of America (NYSE:BAC) up 3.4% and Caterpillar (NYSE:CAT) gaining 3.2% for the week. The Dow’s breadth remains stronger than the Nasdaq’s, suggesting institutional investors are diversifying out of tech into cyclicals ahead of potential monetary easing in early 2026. A sustained break above 47,400 would open the path to the symbolic 50,000 mark, a level that could redefine equity sentiment for Q4.

India’s Sensex and Nifty Maintain Uptrend as Metals and PSU Banks Drive the Charge

Asian equities mirrored Wall Street’s resilience. The Sensex (BSE:SENSEX) advanced 0.28% to 81,207, while the Nifty 50 (NSE:NIFTY) gained 0.23% to 24,894, underpinned by robust performance in metals and state-owned banks. The Nifty Metal Index surged 4% during the week on a weaker U.S. dollar, expectations of EU steel import tariffs as high as 50%, and renewed demand prospects from China’s production curbs. The Nifty PSU Bank Index also rallied 4.2%, fueled by improved credit growth and lower NPA expectations ahead of the Q2 earnings season.

Technically, the Nifty’s immediate support sits at 24,747, while upside targets stretch to 25,400, coinciding with the 61.8% retracement of its recent decline. The Bank Nifty remains comfortably above its 50-day EMA near 55,120, with resistance at 56,150 and rising support at 54,800–55,000. Analysts expect near-term consolidation followed by renewed buying interest once Q2 results confirm earnings resilience.